I wanted to take this opportunity to shed some light on a very controversial topic that the Amish question the answer to, and that is the tax deadline upon us.
There are multiple reasons why this subject is highly debated, and two that I would like to discuss.
Taxes are charged by many levels of government in order to carry out many different functions, including education, welfare, protection of property, enforcement of law, public works, public transportation, and building and maintaining roads.
Despite the fact that the Amish may not directly contribute to these advantages monetarily, numerous of these governmental operations benefit everyone — including the Amish — regardless of whether or not you concur with these operations is a separate subject altogether.
The most evident instance is the construction and upkeep of highways.
Do the Amish pay taxes for roads? They use buggies and horses to drive on bridges and roads, but they do not pay consumption taxes. The cost of this is mainly paid through tolls collected from drivers and revenue from driver’s licenses, with gas taxes being the main source of payment.
The controversial nature of this topic is the second reason why there is an assumption that the Amish do not pay any taxes, due to the lack of information.
That is absolutely false.
There are taxes that the Amish do not pay, but in each of these instances, it is due to:
Note: In order to receive any of the tax exemptions I am about to discuss below, an Amish person must formally join the Old Order Amish church. Amish join the church when they feel ready to do so, and in most cases this is in the late teen years. Once joining the church there is a form to be filled out that will make them eligible for certain tax exemptions.
Do Amish Pay Taxes? Yes. But Not All of Them
Income taxes, similar to the rest of us Englishmen (referring to Americans who are not Amish), are a component of the Amish financial existence, and they also claim any eligible Child Tax Credits valued at a maximum of $1,000 per child.
Most Amish families have children aged 8 and above. But how can they manage to run those large family businesses and farms?
I remember one of our neighbors while I was growing up who had twelve children. When I naively implied that her family was huge, she blushed and said that she has had one new child every two years like clockwork since the beginning of her marriage. This definitely cuts down on their tax bill.
The Amish, like the rest of us Englishmen, are required to pay income tax. Click To Tweet.
As the Amish possess a significant amount of land, they also contribute towards property and educational taxes.
In Pennsylvania, school tax is a type of property tax.
“First and foremost, property taxes fall under the jurisdiction of your local governments, specifically your county, municipality and school district. Property taxes continue to be a primary source of funding for these governments, as this tax is the only tax authorized by law to be levied by all three, where every property owner pays tax to each, unless otherwise exempted.”
I found an article here that explains how exclusions can help reduce taxes for a home on a farm. There is also the Homestead Exclusion, which eliminates (not reduces) the amount of property and school taxes owed. They can receive and apply the Farmstead Exclusion, but only under the Taxpayer Relief Act.
Even though Amish land-owning families do not benefit from them and do not pay property taxes for schools, they teach their children in one-room schoolhouses where single, devout women grade the 8th.
Property taxes on a considerable sum of money are likely to be paid by families who own large, typically stunning homes.
Lastly, the Amish are responsible for paying estate taxes too.
Mennonite and Amish Social Security Exemption
The Amish refrain from receiving unemployment, social security, or welfare benefits due to the contradiction with their religious principles.
Consequently, they have been relieved from contributing to these systems.
This verse from the Bible has been cited to explain the specific religious belief rooted in the Amish community, ensuring their kind of faith.
I Timothy 5:8 says “But if any provide not for his own, and especially for those of his own house, he hath denied the faith and is worse than an infidel.”).
In order to qualify for the exemption, individuals need to belong to an acknowledged religious group, be self-employed, and relinquish any entitlement to receive Social Security benefits during their retirement.
The application for exemption from Medicare and Social Security taxes benefits from the IRS Waiver and must also be filed with Form 4029.
Note: if they are not self-employed, and their employer has not filed that same form, then their wages are still subject to Social Security taxes.
They also believe that insurance is an external indication of a lack of trust in God.
For these corresponding spiritual justifications, the Amish possess an exception within the recent Healthcare legislation, which enforces the requirement for every individual to possess health insurance. This exception remains internal, excluding any external entity, however, it can be considered a form of insurance. No individual departs until sufficient funds have been accumulated to alleviate the burden of a substantial bill that surpasses their means. During their regular church assembly, they publicly communicate the situation to their fellow community members. Instead of relying on insurance, they collaborate as a collective to contribute towards medical expenses, reconstruction of residences and agricultural lands, and other related necessities.
This exemption was written into the Medicare Bill of 1965, which allows survivors and the elderly to have a form of insurance that they do not have to pay for nor collect. It is a very interesting series of events that you may wish to read about.
Psst: do Amish have social security numbers? Yes, they do still have social security numbers.
Do Mennonites Pay Taxes?
Indeed, Mennonites are obligated to pay taxes, similar to how Amish individuals also fulfill their tax obligations.
Like the Amish, the Mennonites are also a qualifying religious community that can meet the requirements for the religious exemption from Social Security taxes.
Do Amish File Tax Returns?
Yes. The Amish also file tax returns — just like the rest of us.
Consumption Taxes Not Paid — Gas and the ‘Sin’ Taxes
Your way of life determines the taxes on goods and services that you have to pay.
Gasoline is not utilized by horse-drawn carriages, which serve as the primary means of transportation for the Amish community, known for their significantly more restrictive way of life. Similarly, the Amish also refrain from utilizing gasoline.
The proceeds from the State typically go towards transportation projects and other roads. The average taxes on diesel fuel are 53.1 cents per gallon and the average taxes on gasoline are 48.1 cents per gallon. The federal excise tax on diesel fuel is 24.4 cents per gallon and the tax on gasoline is 18.4 cents per gallon. The Amish, for example, do not pay gasoline taxes.
Even though the Amish do not contribute their funds towards repairing the roads, some damage has been known to be caused by their horseshoe-clad horses.
It is interesting to note that certain counties in Ohio and Indiana have a large and growing population of Amish, which necessitates license plates for their buggies.
Tobacco leaves are air-dried in specially designed barns that have intervals of wooden slats to allow for proper air circulation in Lancaster, Pennsylvania’s Amish country during a journey.
Smoking is prohibited in numerous Amish groups, although they do engage in cigar and pipe smoking as well as the use of chewing tobacco. However, they refrain from purchasing cigarettes as they are considered to be ‘worldly’, even though some Amish individuals earn money by selling tobacco.
This means that states may fund various programs such as education, health, and research on breast cancer and early childhood development using revenue from taxes on tobacco use. While other tobacco products may pay taxes, cigarettes do not.
Your way of life determines the taxes on goods and services that you have to pay. Click To Tweet
The Amish do not receive payment for alcohol or gambling winnings, and similar ‘sin’ taxes are likely not paid by the majority of us either!
The current federal alcohol tax is $2.14 on a fifth and 33 cents on a six-pack of beer, as well as 21 cents on a bottle of wine. The Amish do not pay the alcohol tax and they choose not to consume alcohol.
The rates of alcohol taxes imposed by the state, which may differ, typically contribute to the general fund of the respective state.
And finding an Amish person in a casino would be like finding my grandmother in couture — it’s not going to happen.
Do the Amish pay taxes? Can I think that the above answer is yes, because they are exempt from Social Security benefits when they retire, either due to their exemption to Social Security or because they do not receive it. They are also exempt from paying some taxes because of their consumption habits or because they are exempt while others have to pay.